The furlough scheme has been extended until the end of April 2021, with the government continuing to contribute 80% towards wages, the Chancellor has announced
In a move to ensure firms can access the support they need through continuing economic disruption, Rishi Sunak also confirmed he would be extending the government-guaranteed Covid-19 business loan schemes until the end of March.
These changes come ahead of the Budget, which the Chancellor has confirmed will take place on 3 March 2021. This will deliver the next phase of the plan to tackle the virus and protect jobs, so the extensions to the business loan and furlough schemes enable businesses to plan with certainty and access support in the first few months of the New Year ahead of the further update on wider Covid-19 economic support.
Chancellor of the Exchequer Rishi Sunak said: “We know the premium businesses place on certainty, so it is right that we enable businesses to plan regardless of the path the virus takes, which is why we’re providing certainty and clarity by extending this support, as well as implementing our Plan for Jobs.”
The Chancellor said he would review the employer contribution element of the CJRS in January but decided to bring this forward to allow businesses to plan for the remainder of the winter and the New Year.
The government will continue to pay 80% of the salary of employees for hours not worked until the end of April. Employers will only be required to pay wages, National Insurance Contributions (NICS) and pensions for hours worked; and NICS and pensions for hours not worked.
The eligibility criteria for the UK-wide scheme will remain unchanged and these changes will continue to apply to all Devolved Administrations.
Businesses will also be given until the end of March to access the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme. These had been due to close at the end of January.
The schemes have already provided over £68 billion in guaranteed loans.
The government has already announced that more support will be available beyond March, through a successor loan scheme. More details of the scheme will be announced in the future, with the government providing a further update on wider Covid-19 economic support at the Budget on 3 March.
Extending the CJRS until the end of April aims to give businesses more certainty well ahead of the 45-day redundancy notice period, with the Budget setting out the next phase of support more than 45 days before the new end date of the scheme.